When Davis LLP unceremoniously dumped me on January 11, 2008, and I began looking for another law firm to take up the suit, I still had little to go by other than the firms’ own advertisements; there was still no independent data available about lawyers on the Web. Having unsuccessfully spent a few weeks on the search, I decided to contact Jonathan Stainsby of Heenan Blaikie LLP, to ask him, not to take me back, but to recommend a reasonable lawyer. Since I had terminated his services some five years earlier, I hadn’t kept in touch with him, and I didn’t know what his response would be when I looked to him yet again to toss me a lifeline. That he would be surprised to hear from me after all these years I had no doubt, and I said so in the e-mail that I sent him on February 20, 2008. I added: “I wouldn’t be angry with you if you told me to go to hell.”
“I hope you are well,” he wrote me back the same day, “and I was surprised, but also pleased to hear from you. I have long been curious as to what was happening with your case.” And coming to the heart of the matter, “I am thinking,” he said, “of how I might be able to help.”
The previous five years had been kind to Jonathan Stainsby, and deservedly so. He had a thriving practice defending multinational corporations. When I contacted him by e-mail, he was in Indianapolis, Indiana, on a case. His rate had gone up significantly, too. When I left him in 2002, remember, it was because his hourly fee had increased from $320 plus GST to $360 plus GST, and it seemed to me by the time the case was filed in court, which I thought would happen some three years later, it would exceed $500 an hour. My estimate was accurate. His rate was now $640 an hour plus GST. As a senior structural engineer, I would need to work three and a half days to pay his one-hour charge.
“You don’t want me—I am too expensive now,” he correctly gauged. “One thought though is for me to connect you with a younger lawyer here who could run the case using his (or her) and my names … My thought was to have a younger lawyer prepare material and deal with matters day to day … This could be relatively inexpensive, as I know much (though not all by any means) of the background.” If I preferred another law firm, he promised to find one for me. He didn’t need my business; he was just being helpful, offering to represent me.
There were, however, conditions attached to his taking the case, and he explained them to me. “Either way,” he said, “perhaps we could agree that HB [Heenan Blaikie LLP] would be retained to take this case to mediation and try to achieve a worthwhile and satisfactory settlement … We could agree that that would be the limit of the retainer [$5,000] up front, and revisit the situation depending on the outcome. The difficulty that a lawyer faces here is that the trial could be expensive. Unless there is an understanding going in, the firm could be required to continue even if you could not pay. This could be a real problem for you in the context of finding new counsel.”
When I left home on the morning of April 24, 2008, to attend the mediation, therefore, it was with the knowledge that the event was quite possibly the last shot I had at resolving the matter. And I was not the only one who was aware of that fact; as we shall shortly see, the defence team came prepared to exploit my weakness. What they felt about the strength of their case, however, could be seen from the documentation (mediation brief) they submitted:
The Plaintiff [me, that is] commenced an action against Anne Stone, Michael O’Connor and Robert Allen … Then he commenced a second suit against the Defendants [the National Post] … [B]y settling the first claim as he did, the Plaintiff has attempted to resolve some of the bedrock issues in the instant litigation …
This approach is a transparent attempt to obtain an inappropriate advantage through “divide and conquer”—an effective tactic on occasion in the field of battle but one which the Court should discourage within the rules, procedures and procedural fairness normally protected through the administration of justice.
No one on the National Post’s side was even pretending that, with Anne Stone’s retractions, they had a case left. During the mediation, which lasted over four hours, the argument centred on whether or not I had the wherewithal to pursue the matter further. It was a point that the National Post’s lawyers continued to hammer, and which the mediator used to bludgeon me with. The session was presided over by Gary Caplan of the Toronto law firm McCague Peacock Borlack McInnis & Lloyd LLP. And the defence had come in force. Rare for mediation, the National Post had assigned its in-house lawyer to accompany John Webster, who worked for the insurance company that underwrote the paper. Noah Richler, too, was present, although he had long ceased working for the National Post and he had no connection with any of the parent company’s media branches, print or broadcast.
During the mediation, I learned for the first time details of Canadian defamation law and applications that had deliberately been kept hidden from me by my lawyers for the previous seven years. The average amount of money that Canadian courts award in a libel suit is, I was told, a mere $50,000. The successful party may also expect to collect up to 60 percent of his or her legal fees. Whether or not one wins a case, one will shoulder the remaining 40 percent; it is the court’s way of discouraging frivolous lawsuits.
As though this was not clear enough, Gary Caplan, the mediator, proceeded to give me a specific example, with numbers. Suppose, he said, scribbling on the chalkboard, you have spent $200,000 on the lawsuit. Suppose also that you win the case in court. You will then be awarded $50,000 plus 60 percent of your legal bill, or $120,000; in total, you will be collecting $170,000. Even after a successful lawsuit, therefore, you will still be short by $30,000. Whether or not you win the case, under the current system, you are bound to lose money.
Admittedly, I had known that a typical defamation award in Canada was “very small.” But I never suspected it could be nearly as low as the figure given to me on the morning of April 24, 2008. I may not be a lawyer, but I have good mathematical sense. Had I known that $50,000 was what I stood to collect after a successful court trial, I would most certainly have ended the lawsuit a long time before. Not only would it have made financial sense to do so, but it would have spared me years of agony and suspense as well.
After hours of such exposition, I was prepared to cut my losses and settle. My legal bill had already exceeded $150,000, including the latest round of invoices from Heenan Blaikie LLP and the mediator’s office but not the $25,000 writeoff that Jonathan Stainsby had secured for me at the beginning. In addition, I had lost many thousands of dollars in earnings, particularly during the first few months of the media blitz, when I was too incapacitated to go to work. If I ended the lawsuit at this juncture, I figured, using the formula just given to me, I would recover approximately $120,000 of my expenses. (I couldn’t expect to get back any of the $35,000 that I had spent in legal fees during the first phase of the lawsuit, involving Anne Stone and her associates.)
But I was negotiating from a position of weakness, if only because of my dire financial situation. And the National Post’s lawyers wasted no time in pointing that out to me. They already knew that I didn’t own a house that I could sell or use as collateral to raise the money that I would need to carry the case further. And they were aware that I generated most of my income from my engineering job. (They could make a reasonable estimate of the royalties that I collected from the sales of my books, as the figures were in the public domain.) What’s more, by changing lawyers at such a stage, they realized, I had made my financial position even more precarious. John Webster argued that his fee was much less than Jonathan Stainsby’s, and that he could take the gamble of walking out of the mediation; assessing risks is what insurance companies do best, and the odds were unquestionably in his favour. And how much more money would I need if I wanted to take the case to trial? Jonathan Stainsby gave me that answer: at least another $100,000.
The most the National Post’s lawyers were willing to give me was $80,000—two-thirds of the average settlement, and approximately half of the total money that I had spent on the lawsuit. I was not the only one who felt wretched about this; Jonathan Stainsby, too, thought I was offered a very unfair deal. There might be a way we can take the case to a pretrial, he said to me. Unlike mediation, where the negotiating parties decide what is a fair settlement, at the pretrial a judge weighs in. And Jonathan Stainsby thought I could get a better deal at the pretrial. But I realized that it was a futile gesture; there was no way I could afford to pay his fee even under the favourable arrangement he had made for me, with his assistant, Jon Smithen, doing the bulk of the work. Had it been David Foulds, I could have argued that I could afford to stay in the battle.
So I settled for the $80,000 offered to me.